I've told this story for years. It's time I share it with you here.
A guy called me from Maine. He had bought a piece of equipment for his Delaware facility and had it shipped there. But because of several factors, he had the equipment picked up and stored at a facility in Philadelphia for a couple of months.
His question was, "Do I owe Pennsylvania use tax?" The answer is yes. He used the equipment in Pennsylvania, therefore he owes Pennsylvania the tax on his use of the equipment.
He argued that he hadn't used it in Pennsylvania. My response was that he used it by having control over it in Pennsylvania. He didn't have to be there. He just had to have control over it. He could have picked up the phone, told the guy in Pennsylvania to move the machine back to Delaware right away, and the machine would have been move. Control.
Now keep in mind that most states will, to some extent, give credit for SUT already paid on property brought into the state. And Pennsylvania would too. But since the machine went to Delaware, where there is NO sales and use tax, there was nothing to give credit for. So he owed the full Pennsylvania use tax. Some states have exemptions for this sort of thing. Pennsylvania doesn't.
And to add insult to injury, since he stored it in Philadelphia, he would owe the higher tax. Pennsylvania's tax is 6%. It's 7% in Pittsburgh and Philadelphia.
Isn't this stuff fun?
Sales Tax Guy
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Picture note: Philadelphia City Hall